Finance Minister Nirmala Sitharaman, presenting the Union Budget 2024, announced significant changes to the tax regime aimed at providing relief to salaried individuals and pensioners. One of the key highlights was the increase in the standard deduction from ₹50,000 to ₹75,000.
Revised Tax Slabs and Standard Deduction
The Finance Minister unveiled the revised tax slabs under the new tax regime:
- Income up to ₹3 lakh – Nil
- ₹3 lakh to ₹6 lakh – 5%
- ₹6 lakh to ₹9 lakh – 10%
- ₹9 lakh to ₹12 lakh – 15%
- ₹12 lakh to ₹15 lakh – 20%
- Above ₹15 lakh – 30%
Sitharaman highlighted that salaried employees could save up to ₹17,500 under the new regime. The anticipation of a hike in the standard deduction had been widespread, with many expecting it to double to ₹1,00,000. While the increase fell short of these expectations, it still represents a notable relief for taxpayers.
Also Read: Union Budget 2024: What’s Getting Cheaper And Costlier?
Relief for Pensioners
In addition to the changes for salaried individuals, the deduction on family pensions will be increased from ₹15,000 to ₹25,000, providing further support to pensioners.
Impact on the Middle Class
These adjustments are set to benefit around four crore salaried individuals and pensioners. Changes to income tax slabs and the introduction of the increased standard deduction come as a response to the middle class’s demand for relief from tax burdens. Despite no changes to the old tax regime slabs or an increase in the exemption limit, the revisions aim to ease the financial strain on taxpayers.
Tax on Financial Assets
The Budget also introduced changes to the taxation of financial assets. Short-term gains on certain financial assets will be taxed at 20%, while long-term gains on all financial and non-financial assets will attract a tax of 12.5%.
Boost for Start-ups and Cruise Tourism
In a move to bolster the start-up ecosystem, the government announced the abolishment of the angel tax for all classes of investors. This tax was previously levied on the excess realization considered as income. The abolition drew praise from across the political spectrum, including Congress leader and former Finance Minister P. Chidambaram, who noted that Congress had long advocated for this change.
Additionally, the Budget proposed a simpler tax regime for foreign shipping companies operating domestic cruises in India, aimed at boosting cruise tourism in the country.